Seán Fleming (Laois-Offaly, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform if he will outline new initiatives undertaken since 31 March 2012 in respect of shared services across the public service and the associated cost savings; and if he will make a statement on the matter. [51814/12]

Brendan Howlin (Wexford, Labour)
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The shared services programme, as set out in the public service reform plan, is being implemented incrementally. Good progress has been made since the end of March, principally in respect of the following; a shared services transformation unit has been has been established within my Department and is working with nominated senior officials to ensure ambitious and robust plans are developed and implemented in the other key sectors of health, education, justice, defence and local government; a shared service entity, PeoplePoint,has been established for administering transactional Civil Service human resources and pensions activities; a base-lining exercise of Civil Service payroll, which describes the processes, systems and estimated costs of current provision, has been completed and the business case is now being developed; a base-lining Civil Service financial management and banking services has recently commenced; a high level review of procurement has been conducted; and the appointment of a chief procurement officer is in train.

Based on experience from abroad, a shared service centre cannot deliver savings until it is fully established and stabilised. This typically takes two years and the payback period is usually four years. For this reason, it is not possible at this stage to provide information on actual savings. That said, I am satisfied with the progress made to date. An ambitious transformation plan is being implemented for the Civil Service and the shared services transformation unit is working with nominated senior officials to ensure similar plans will be implemented in the other key sectors of health, education, justice, defence and local government.

We are building the appropriate expertise, engaging with each key Department in a structured way and ensuring that decisions will be based on strong evidentiary platforms derived from baselines and business cases. International experience shows that this is the best way to realise maximum benefits from shared services over time.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Was the Department's new shared services transformation unit involved in the establishment of Student Universal Support Ireland, SUSI? The new service, which was established at considerable cost to provide shared services among the various agencies processing third level grants, is a disaster. While I agree that services can be provided more efficiently, does the Department have sufficient internal competence to ensure shared service initiatives work? Last week, officials from the Health Service Executive appeared before the Committee of Public Accounts to discuss public sector allowances. The HSE chief executive designate, Mr. Tony O'Brien, indicated at our meeting that with eight payroll systems operating in the health service, it is not possible to obtain timely information because the systems are dispersed throughout the country. Shared services in the HSE, the largest employer in the State, are urgently required. The Department's shared services transformation unit should work on this issue if it has the necessary capability.

Some local authorities have produced a programme for shared services. My local authority, Laois County Council, is seeking to have one organisation provide all payroll and pension services for all local authorities, with the possibility of having shared human resource services rolled out subsequently.

I am surprised by the Minister's statement that the system will not deliver cost savings for the first two years of operation. While a set-up cost is to be expected, people will be shocked to learn that it will take a further four years to recover the initial outlay. It appears that savings will not be achieved for six years. Greater efficiency is required to ensure repayment is made to taxpayers more quickly.

Brendan Howlin (Wexford, Labour)
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I will address the Deputy's final point first. Having examined international best practice, we found that, on average, the payback period is approximately four years. Savings, albeit not necessarily in cash, will be achieved immediately. Having accelerated the transfer of activities into the PeoplePoint human resource management entity, we estimate this initiative will achieve an immediate 20% saving in staffing. However, as we do not sack people in the Civil Service, the staff affected will be redeployed and the reduction in staff cannot, therefore, be counted as a saving. PeoplePoint is operating much more efficiently than the previous system and allows staff to do other front-line work.

The Deputy asked a question about Student Universal Support Ireland, SUSI. My Department was not involved in this project, for which preparation work commenced some time ago, and I am not familiar with the details. It is a matter for the Minister for Education and Skills. We are carefully evaluating the shared services we are structuring and doing a baseline analysis of data, after which we will do a business case. We are acting in a robust manner and know what we are doing.

We have recruited people with expertise to run these services. Designated senior officers in each sector will be responsible. We will have a dialogue on the reform plan, but we are progressing in a structured, measured and visible way.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am satisfied with the principle of shared services. Given the fact that 40 local authorities each have different systems to do the same work, there is scope. After people have received their third level grants in January, the new shared service transformation unit needs to find out what happened in Student Universal Support Ireland, SUSI, to prevent a recurrence. The Minister seems to be saying that it is a matter for the Department of Education and Skills. However, he is embarking on a programme of shared services across the public service, and one of the most public and largest operations under that heading has caused a disaster. This is notwithstanding the fact that it commenced prior to his Department coming into being. If the Department learns nothing by next February except how to avoid repeating such mistakes, it will have been a good period's work. I advise the Minister to take a hands-on approach, to learn the lessons and to have his Department and not just the Department of Education and Skills examine the matter.

Brendan Howlin (Wexford, Labour)
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The Deputy has made a fair point. I will ensure that we learn from the analysis of whatever failings, faults or mistakes occurred in the processing of student grants so that the lessons can be applied generally across the other shared services on which we embark.